CMS Updates its Quality Strategy to Build a Better, Smarter, and Healthier Health Care Delivery System

By: Patrick Conway, M.D., MSc, Acting Deputy Administrator and Chief Medical Officer, CMS

At the Centers for Medicare & Medicaid Services (CMS), we are working with public and private partners to build a health care delivery system that delivers improved care, spends health care dollars more wisely, and makes communities healthier. Our goal, set out by the Administration, is to shift Medicare payments from volume to value – tying 30 percent of traditional Medicare payments to alternative payment models and tying 85 percent of all traditional Medicare payments to quality or value – by the end of 2016. And, we are making progress.

Today we are sharing our updated 2016 CMS Quality Strategy (, which incorporates this progress made in shifting Medicare payments from volume to value, since the last time we shared the CMS Quality Strategy in 2014. In addition, the updated 2016 version updates progress made on the payment reform initiatives as well as new requirements from the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) and the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) legislation. The implementation of MACRA is a major opportunity to put a broad range of health care providers on the path to value through the new Merit-Based Incentive Payment System (MIPS) and incentive payments for participation in certain Alternative Payment Models (APMs).

This document guides the various components of CMS, including Medicaid, Medicare and the Center for Consumer Information and Insurance Oversight, as they work together toward the common goal of health system transformation. We hope that through the communication of the 2016 CMS Quality Strategy Update we continue to build support for and promote the CMS Quality Strategy so that our partners can align initiatives with key CMS desired outcomes.

The 2016 CMS Quality Strategy is built on the foundation of the CMS Strategy (, and the HHS National Quality Strategy (NQS) ( The main purposes of the 2016 CMS Quality Strategy update are to achieve the broad aims of the NQS and to apply the Administration’s strategy for shifting Medicare payments from volume to value:

  • Better Care: Improve the overall quality of care by making health care more person-centered, reliable, accessible, and safe.
  • Healthier People, Healthier Communities: Improve Americans’ health by supporting proven interventions to address behavioral, social, and environmental determinants of health and deliver higher-quality care.
  • Smarter Spending: Reduce the cost of quality health care for individuals, families, employers, government, and communities.

The 2016 CMS Quality Strategy goals reflect the six priorities set out in the NQS and identify quality-focused objectives that CMS can drive or enable to further these goals:

  • Goal 1: Make care safer by reducing harm caused in the delivery of care.
  • Goal 2: Strengthen person and family engagement as partners in care.
  • Goal 3: Promote effective communication and coordination of care.
  • Goal 4: Promote effective prevention and treatment of chronic disease.
  • Goal 5: Work with communities to promote best practices of healthy living.
  • Goal 6: Make care affordable.

To meet these six goals CMS will:

  • Measure and publicly reporting providers’ quality performance and cost of services provided;
  • Provide technical assistance and foster learning networks for quality improvement;
  • Adopt evidence-based National Coverage Determinations;
  • Create incentives for quality and value;
  • Set standards for providers that support quality improvement; and
  • Create survey and certification processes that evaluate capacity for quality assurance and quality improvemen

Like the NQS, the 2016 CMS Quality Strategy was developed with the input of stakeholders, led by the CMS Quality Strategy Affinity Group under the CMS Quality Improvement Council (QIC).  We made Affinity Groups to align and coordinate quality and value programs at CMS. The QIC ensures coordination, continuous learning, and the dissemination and spread of quality improvement activities across the agency.

Today’s release of the 2016 CMS Quality Strategy helps to align all of CMS to:

  • Drive improvement on specific quality strategy goals and objectives.
  • Strengthen our relationships within the agency.
  • Build advocacy across HHS agencies.

We are excited to put the updated 2016 CMS Quality Strategy into action so we can do our part   to transform health care.

New CMS Web Tool Will Improve Access to and Transparency of Information on Medicare Enrollment, Utilization, and Expenditures

Niall Brennan, Chief Data Officer, Centers for Medicare & Medicaid Services

CMS continues to develop enhanced web-based data analytic and visualization tools, and I’m excited to announce that the most up-to-date Medicare enrollment information is now available to the public through our new CMS Program Statistics website. The website features web tools for users to explore CMS data, including viewing maps and examining enrollment information, through an interactive dashboard.

The CMS Program Statistics website replaces the former Medicare and Medicaid Statistical Supplement, which was published annually in electronic form from 2001-2013. The website will include over 100 detailed, easy-to- access data tables on national health care, Medicare populations, utilization, and expenditures, as well as counts for Medicare-certified institutional and non-institutional providers. Today, we have released the first two sections, which include information on national health expenditures, life expectancy, population projections, and Medicare enrollment and providers, and we will continue to release other sections on a rolling-basis.

The website also allows users to search for Medicare information in a visually appealing, easy to navigate format through the new Medicare Enrollment Dashboard. The Dashboard is an interactive online tool presenting monthly Medicare enrollment figures and yearly trends for hospital/medical coverage and prescription drug coverage by geographical areas, including national, state/territory, and county. The figures below provide snapshots of the readily accessible data available in the Dashboard. Figure 1 presents yearly trends in Medicare enrollment. In 2014, over 54 million people were enrolled in Medicare – about 7 million more than in 2010. Over that same period, the share of Medicare beneficiaries enrolled in Medicare Advantage and other health plans increased from 25% in 2010 to 30% in 2014. Figure 2 presents Medicare Advantage penetration rates by state and shows that Medicare Advantage enrollment is highest in California, Florida, Oregon, Minnesota, Ohio, and Pennsylvania, with 40-59% of Medicare beneficiaries enrolled in Medicare Advantage in those states.

Figure 1. Yearly Trends in National EnrollmentCMS Program Statistics and Dashboard Blog 11-20-2015 FINAL_Page_1_Image_0001

Figure 2. Medicare Advantage Penetration Rates by State

CMS Program Statistics and Dashboard Blog 11-20-2015 FINAL_Page_2_Image_0001


The CMS Program Statistics web tools are just the latest example of CMS improving data transparency and access for beneficiaries, researchers, and health care leaders. CMS is supporting a better understanding of our nation’s health care system while adding insight into the geographic patterns of Medicare health care and prescription drug coverage. Our goal is to ensure our data are accessible not just to researchers, but also to the general public. We look forward to continuing our efforts to make our data available as a resource to communities across the country.

Get more information about the CMS Program Statistics website on the CMS Program Statistics home page ( Reports/CMSProgramStatistics/index.html)

Remarks of CMS Acting Administrator Andy Slavitt at the HHS Pharmaceutical Forum: Innovation, Access, Affordability and Better Health

The following are comments prepared for delivery by CMS Acting Administrator Andy Slavitt at the HHS Pharmaceutical Forum on Friday, November 20, 2015. The forum is bringing together consumers, providers, employers, manufacturers, health insurance issuers, representatives from state and federal government, and other stakeholders to share information and discuss ideas to increase access to information, drive innovation, strengthen incentives and promote competition. For more information on the forum, visit the forum’s website at


Thank you all for being here today. We have leaders from patient groups, health plans, providers and manufacturers, and remarkably, everyone is here to come together around the same opportunity: to ensure Americans have and maintain access to life-changing and life-saving treatments. Through innovations in life sciences and genomics, we have unprecedented opportunity to cure and manage disease like never before. I thank you for your commitment to the discovery and development of these vital treatments, and also your growing cognizance of public concerns regarding the accessibility of these medicines.  Let me do my best to frame both the challenge and the opportunity and where I believe we most need your input into the challenges we are discussing today.

At CMS, we start this discussion the same place we start everything– with the 140 million beneficiaries and consumers we serve. Millions of our consumers – whether Medicare, Medicaid, CHIP or Marketplace — rely on prescription medications to manage chronic illnesses and treat acute conditions. The science and innovation engine that are creating the medicines of the future will be an instrumental component of the quality of life of today’s and tomorrow’s beneficiaries. But surveys also tell us that as costs go up, so does everyone’s anxiety about their continued access to their prescription medicine.  And because we all plan to use the Medicare program one day, it’s not just today’s beneficiaries, but all of us who have a stake in the long term accessibility of new therapies.
Today’s discussion is designed to begin a dialogue that allows everyone in this room and beyond to chart a path that continues to encourage scientific discovery and ensures those discoveries are accessible to those that need it. As we encourage the development of new generations of highly targeted, personalized therapies, we need strategies for ensuring access to these innovations.  It is in all of our interest to find ways to improve affordability and access for patients, support and increase innovation in the industry, and – most importantly – make people healthier.


In 2014, CMS spent $140 billion on prescription drugs for seniors, the working poor, children, and FOR PEOPLE WITH DISABILITIES in the Medicare and Medicaid programs. This doesn’t include prescription drug spending for the Children’s Health Insurance Program and the Marketplaces, where monthly premiums are highly influenced by prescription drug costs.  Spending on medicines increased 13 percent in 2014, compared to 5 percent for health care spending growth overall, the highest rate of drug spending growth since 2001.

Drug costs are not just the states and federal government’s fastest growing cost, but through Part B and D premiums, co-insurance and deductibles, our beneficiaries pay 16 percent of the bill, making this a real kitchen table issue for working families and retirees. Per capita Part D costs increased by 11 percent in 2014, driven by increased spending on high cost drugs in the catastrophic phase of the benefit.

Given these costs, consumers’ access is already under threat. Surveys suggest that as many as 1 in 4 Americans cannot afford and, therefore, do not fill the prescriptions on which their health depends. State Medicaid agencies in some cases are in the difficult position of withholding vital therapies for people in need. The reality is cures and improvements in the quality of life are not available to everyone. Access isn’t a problem of the future – it’s a problem of today and evidence suggests that this trend of diminishing access will continue if we do not work together to find viable solutions.

One element of the challenge is specialty drugs, which are a small fraction of prescriptions but nearly a third of all costs, and growing very rapidly. These therapies are expensive to develop, and for every great cure, there are many failed investments; but we need discussions and solutions that allow us to bear the cost of development fairly and reasonably and not have it threaten access to the very people the drugs are developed for. Hepatitis C and the new drugs available to treat the disease shine a light on this issue. We have the potential to cure the disease however, tight state Medicaid budgets struggle to provide broad access to this cure.

Generic medications have been one element of this affordability strategy. Each year, the use of FDA-approved generics save the country $200 billion. However, in some instances, the prices of generics available for years have increased substantially without any additional health benefits for patients. This is a concern across the country, but particularly for consumers on fixed incomes. We need better insights and visibility as generic medication prices begin to grow.

So how do we make sure our beneficiaries have access to the best quality medications so we can keep them healthier? And how can we do this not only today but into the future – when more people are gaining coverage  by aging into Medicare or under expanded Medicaid – and the pipeline of high cost specialty drugs continues to grow?
I have had a number of conversations recently with innovative manufacturers, health plans, patients, and other stakeholders in this room and out of it, and I can report, as you’re hearing today, a great interest in finding a strategy which gives broader access to the innovations being created today and in the future. The right ideas will in turn create bigger markets for innovators and should serve to create a more predictable climate for investors to support the innovation we need. We shouldn’t have to choose between innovation and access. As a country we can work together to find strategies to achieve both.


Understanding how to approach this challenge begins with an open dialogue, a shared set of facts and a search for the best ideas. Different interests may have different views but we believe there are a common set of objectives we are working towards.

We believe patients, manufacturers, providers, insurers and government all share a common goal to foster a health care system that leads in innovation, delivers affordable, high quality medicines, and results in healthier people with access to the care they need.

As we continue to engage with many of you, my hope is that we continue to hear real, practical ideas to maintaining innovation while finding ways to improve access.  We are particularly interested in continuing to hear your ideas across a few important domains.


The first is the domain of value and value-based payments. Our scorecard for customers and taxpayers can be summed up by the word value.  As a purchaser, a logical question to start with is are we getting good value for the consumers and taxpayers dollar? Over the last year, we at CMS have moved strategically towards rewarding physicians, hospitals and other care providers who deliver better health care, spend our money more wisely and most importantly, keep people healthier. We have committed that within the next two years, paying through these alternative payment models will be the dominant way we reimburse for care. We’ve done this in close partnership with care providers, experimenting with new models, taking feedback, improving the models and publishing the results transparently.

And just as we pay for quality in care delivery, how should we create incentives which take the entire health and outcomes for an individual into account? How do we create rewards for therapies that reduce disease, keep people in their homes and out of hospitals or other institutions and control chronic diseases while improving outcomes? What’s the best way to pay for targeted therapies when they work for some patients, but not others? How do we think in terms of episodes of effective treatment, rather than just the cost of a pill? This dialogue on value we are having today presents an important opportunity to understand how to invest in innovation and improve access. We need to learn more.


 The second domain is in information transparency and availability. We don’t have a common understanding of the data and know that drug costs are often unclear. There are list prices, wholesale prices, average wholesale prices, rebates, supplemental rebates, markups from hospitals, markups for physicians, different costs when a drug is administered outpatient than inpatient, formulary tiers, mail order prices, biosimilars prices and of course patent expirations, compounds, samples, and many other ways that end up obscuring the reality of the price paid, who pays it, and how all of it influences treatment decisions. And most of that information is not available or well-understood by the public, making it hard to have confidence that we have a truly functional and transparent market that delivers good value for patients.

The truth is we don’t have enough public information on the effectiveness of new drugs in the real world or about prices and rebate structures. As a result, anecdotes– whether about pervasive generic price increases or other things– draw significant attention.  And in order to avoid reacting to misinformation, we must increase the transparency of the information available about drug pricing and value.

How do we make public the information that will allow us to understand prices and value? How do we educate the public on the cost of these medicines, the value chain, the measures of effectiveness? How do we create visibility into price increase? How do we help the public have an informed debate over the size of Federal and State expenditures or the unit costs or patient value created? We want ideas on the best way to take steps to improve transparency.


 The third domain is incentives and hurdles. We have to understand what has gotten us here in order to make progress. Are there rules and regulations across government getting in the way of affordability and access? What should we look at across CMS, other parts of HHS, or other areas that will allow us to improve affordability? What other hurdles are there? Also what incentives are inadvertently driving up costs? What could be changed about how incentives are created for physicians, hospitals, and pharmacies?

In each of these domains– value-based purchasing, transparency and barriers and incentives– and others, we are committed to taking in all ideas and working collaboratively. We know everyone won’t always agree on every step, but we plan to take these issues on transparently and with public input so we can move forward, learn and improve.  In an effort to work towards solutions that will address the challenges spoken about today and uphold our obligations, we ask everyone in the room to use this forum as a way to better understand the positive role we can all play in this process and consider how we all can contribute to constructive solutions over the coming years.


I hope that today’s public dialogue kicks off a commitment to listening and working together to advance ideas that improve access, affordability and innovation so all Americans have access to the breakthroughs ahead. There are no easy answers to these multifaceted challenges, but there is a significant benefit – to all of us – of working together to find a solution. We want to work together to explore the best ideas, and we are committed to making progress as the public is relying on our ability to find solutions.

We look forward to working with you in the weeks and months ahead. Thank you.



Five Facts about Deductibles

By Kevin Counihan

When you shop for coverage at HealthCare. gov, you’ll have a variety of plans from which to choose. These options allow you to find a plan that meets your health needs and fits your budget. To find the plan that works best for your family, you should consider many different factors, such as how much the premium costs each month, the yearly deductible, what services are covered before you meet the deductible, whether your doctors are in the plan’s network or specific prescription drugs are covered, and whether you qualify for cost-sharing reductions that limit your out-of-pocket costs. While premiums can often be a deciding factor, these other considerations could be just as important.

2015-11-17Factoring in out-of-pocket costs has always been part of buying health insurance, but for the first time now there are a lot of resources to help you better understand your choices at HealthCare. gov. These include new features that allow you to see your total estimated out-of-pocket costs, to search health plans by your preferred provider and to see if your prescription drugs are covered. Today, let’s take a more in-depth look at your plan’s deductible and what it means for selecting a plan that’s right for you.

A health plan’s deductible is the amount you owe for the health care services your plan covers before your health insurance plan begins to pay. Preventive services like cancer screenings, immunizations and well-child visits are always covered without any additional costs to you.  But it’s important to remember that many plans cover the costs for certain key services before you meet your deductible, unlike what you might see in other kinds of insurance like for your car or your home. That means that even though your health plan has a deductible, it might not matter for the services you use most frequently, like primary care visits or generic prescription drugs.

According to an analysis of 2015 plan selections, more than 8 in 10 consumers in 2015 selected a plan that covered some popular health services (beyond preventive care) before meeting the deductible.[1] That includes 53 percent of bronze plan consumers, 88 percent of silver plan consumers, 93 percent of gold consumers, and 99 percent of those who selected a platinum plan.

Here are five things to know about deductibles in Marketplace plans:

  1. All Marketplace plans cover recommended preventive services without a deductible. Services like cancer screening, immunizations, and well-child visits will always be covered without having to pay your deductible, any co-pay, or other costs to you.
  2. Many other health services are often covered without a deductible. Many health insurance plans provide some benefits before you meet the deductible. In those plans, you may be able to visit your primary care doctor or fill a prescription for a generic drug and only pay a copay – a small fixed amount you pay at time of service. Even specialist visits, mental health outpatient services, and brand name drugs are often covered with no deductible, although you will still be responsible for copayment or coinsurance.
  3. Look to see what your plan covers without a deductible. Plans differ in what they cover, so when you find a plan that you’re interested in, click on the plan on gov and look at the “costs for medical care. ”  That section will describe which services have a deductible and which don’t. Another way to get a more detailed view is to click on a plan’s “Summary of Benefits and Coverage.”  There, you’ll see a detailed explanation of how the plan deductible applies to different services, and you can see examples for certain kinds of care.
  4. Consider services covered without a deductible along with your monthly premiums, deductible, and other out of pocket costs when choosing the plan that is right for you. When you choose a health insurance plan, it’s important to understand what your insurance company covers without requiring you to pay your deductible. Then you can decide how to trade off monthly premiums, out of pocket costs including the plan’s deductible, and the set of services covered without a deductible. For instance, do you want a plan with lower monthly premiums and a higher deductible, or one with a higher monthly premium and a lower deductible? You can use our Out of Pocket Cost feature to estimate what your premiums, deductibles and co-pays may be for the year, based on the number of times you go to the doctor or get a prescription filled, to get a better understanding of your total out of pocket costs.
  5. Silver plans can save you more. If you qualify for cost sharing reductions – as most consumers who sign up for Marketplace policies do – you can save more. A family of four with income below $60,625 can qualify for additional savings with lower copays, a lower deductible, and more services covered with no deductible at all. This financial assistance is only available if you purchase a Silver plan; so while a Silver plan may have monthly premiums that are higher than a Bronze plan’s, be sure to consider your total costs. If you qualify, your maximum annual out-of-pocket costs – counting your deductible and all payments after you meet the deductible – could be lowered by thousands of dollars, and your deductible could be lowered as well. Check to see if you qualify for these savings.

We want you to feel confident that you’ve picked the right plan. If you have questions about the options available to you, there are a number of ways to find free, personal help. Representatives at the Call Center are available 24 hours a day, every day (except for Thanksgiving and Christmas Day) at 1-800-318-2596. Call Center representatives can answer questions and help you enroll in coverage over the phone. Free confidential, in-person help is also available at enrollment sites and events in communities across the nation. Visit HealthCare. gov to search for local help in your neighborhood.

[1] This analysis is based on a point-in-time snapshot of plan selection data from 2015. It does not reflect effectuated enrollment.



Reducing Improper Payment: A Collaborative Effort

By Patrick Conway, MD

CMS Principal Deputy Administrator and Chief Medical Officer

CMS is dedicated to promoting better care, protecting patient safety, reducing health care costs, and providing people with access to the right care, when and where they need it. This includes continually strengthening and improving Medicare and Medicaid programs that provide vital services to millions of Americans. We take our responsibility to deliver better care at a better value seriously.

This week, the Department of Health and Human Services released our annual Agency Financial Report, which includes an update on the improper payment rate for a variety of our programs, including Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).

When we talk about improper payments, it’s important to remember what they are and why they happen. To be clear, improper payments are not typically fraudulent payments. Rather, they are usually payments made for items or services that do not meet Medicare or Medicaid’s coverage and medical necessity criteria, that are incorrectly coded, or that do not include the necessary documentation. Correctly recording and documenting medical services is an important part of good stewardship of these programs, and we strive to improve these practices among providers serving Medicare, Medicaid, and CHIP beneficiaries.

I am pleased that this year’s report shows progress is being made to reduce improper payments. The Medicare fee-for-service improper payment rate decreased from 12.7 percent in 2014 to 12.1 percent in 2015. CMS’s “Two Midnight” rule and corresponding educational efforts led to a reduction in improper inpatient hospitals claims, reducing the improper payment rate from 9.2 percent in 2014 to 6.2 percent in 2015. The improper payment rate for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) also decreased from 73.8 percent in 2010 to 40.1 percent as of September 2015. Corrective actions implemented over a six-year period, including the DMEPOS Accreditation Program, contractor visits to large supplier sites, competitive bidding, and a demonstration testing prior authorization of power mobility devices, contributed to the reduction in the improper payment rate for these items and supplies.

While progress has been made, we must continue our work to reduce the improper payment rates in Medicare, Medicaid, and CHIP.

For instance, in the Medicare Part D program, there’s been a 0.3 percent increase in the composite improper payment rate – an increase from 3.3 percent in the 2013 calendar year to 3.6 percent in 2014. This increase is primarily related to long-term care medication orders. We are continuing to work on education and outreach with plans and sponsors to correct for these improper payments. In addition, Medicaid and CHIP experienced increases with their improper payment rates – Medicaid increased from 6.7 percent in the 2014 fiscal year to 9.8 percent in 2015, and the improper payment rate for CHIP increased from 6.5 percent in fiscal year 2014 to 6.8 percent in fiscal year 2015. These increases are largely attributable to new provider enrollment and screening requirements from the Affordable Care Act and Health Insurance Portability and Accountability Act of 1996. We often see such increases when new requirements take effect, as states and providers often need time to modify their operations in order to comply with the updated standards. We believe, however, that these requirements will ultimately strengthen the Medicaid and CHIP programs, and that the improper payment rates will again decrease with state and provider experience. Without these new requirements, the Medicaid improper payment rate would have decreased to 5.1 percent, and the CHIP improper payment rate would have decreased to 5.7 percent.

We believe that increased transparency will help us make additional progress towards reducing improper payments in these programs. In an effort to foster increased transparency, CMS is exploring additional improper payment rate data releases in multiple sectors, including Medicare Part C and D Plans, and contractor level information for Medicare (including fee-for-service, Parts C and D) and Medicaid. This increased focus on transparency and accountability can help CMS encourage states and Medicare stakeholders to take additional actions to help reduce future improper payment rates.

As CMS begins these conversations, we will also refine and enhance the technical assistance provided to states and others to ensure compliance with regulations and reporting requirements that impact the improper payment rate.

We believe these steps – and a continued focus on transparency – will lead to a lower rate of improper payments while continuing to transform our health system to achieve better care, smarter spending, and healthier people.


CMS Awards 16 Partnership-Driven Special Innovation Projects to 10 Quality Innovation Network-Quality Improvement Organizations

Innovating to Close the Gap Between Best Practice & Common Practice

By: Patrick Conway, MD, MSc

Acting Principal Deputy Administrator

Deputy Administrator for Innovation and Quality

CMS Chief Medical Officer

Jean Moody-Williams, RN, MPP

Deputy Director

Center for Clinical Standards and Quality

Dennis Wagner, MPA

Director, Quality Improvement and Innovation Group

Centers for Clinical Standards and Quality

The Centers for Medicare and Medicaid Services (CMS) has taken another step toward ensuring that beneficiaries receive better care, better health and greater value by awarding 16, two-year Special Innovation Projects (SIPs), to 10 regional Quality Innovation Network-Quality Improvement Organizations (QIN-QIOs). The SIPs address healthcare quality issues such as early detection and management of sepsis, advance care planning, colorectal cancer screening, and disease management in rural settings among other critically important healthcare quality issues. The list of 2015 SIPs can be found on the Quality Improvement Organization Program website (

While it is not the first year of the QIN-QIO contracts, the 2015 SIP awards represent a paradigm shift in how CMS views and utilizes the investment made in special quality innovation work. We recognize that there is tremendous quality work occurring in the field, and by requiring that the QIN-QIOs partner with organizations (Federal, State, local community, and/or Private), we can potentially capitalize on interventions that have not made it into mainstream use.

We are excited to study the results produced by these SIPs in the coming two years and will look to the outcomes of these projects for future use in the QIO Program, creating an exciting opportunity for providers, professional organizations, innovation labs, and others to innovate and impact healthcare quality at local, regional or national levels through the QIO Program Strategic Innovation Engine (SIE). The SIE is a new endeavor aimed at advancing CMS’ six quality strategy goals ( by rapidly moving innovative, evidence-based quality practices from research to implementation through the QIO Program and the Medicare program, with the effects spreading throughout the greater healthcare community. The SIE will accomplish this by:

·        Identifying gaps in the quality improvement agenda and recognizing potential innovations through a continuous scan of the quality environment while creating the opportunity for frontline healthcare providers to put forth evidence-based practices for consideration by the SIE;

·       Problem solving, proposing new areas for evidence development in the science of quality improvement, and considering how to rapidly move the nation from best practice to common practice in key healthcare areas; and

·       Working, in conjunction with the QIN-QIOs and their many partners, to purposefully spread evidence-based practices throughout the Medicare program, using multiple channels such as the QIO Program, CMS stakeholder partners, and others, to ultimately provide practical implementation strategies and methods for frontline providers to integrate high impact, high value best practices into their work to ensure patients receive the right care, at the right time, every time.

QIN-QIOs were eligible to submit proposals for two types of Special Innovation Projects in 2015:

Projects addressing issues of quality occurring within the QIN-QIOs’ local service area: “Innovations that Advance Local Efforts for Better Care at Lower Cost.”
Projects focusing on expanding the scope and national impact of quality improvement interventions that have had proven, but limited success: “Interventions that are Ripe for Spread and Scalability.” QIN-QIOs were encouraged to propose interventions intended to reduce mortality, harm, healthcare disparities and costs; provide higher return on investment; link value with quality; and encourage utilization of alternative payment models by providers.
CMS sought proposals with scientific rigor, a strong analytic framework and a reasonable, proposed intervention based on the supporting evidence provided. Additionally, CMS looked for evidence of QIN-QIO partnerships at the community, regional and national levels, and direct links to the CMS Quality Strategy goals.

We look forward to seeing how these SIPs make advances in healthcare quality issues. This program demonstrates our commitment to partner and collaborate with organizations, providers, and people across the country to achieve better care, smarter spending, and healthier people.



Prescription Drugs: Advancing Ideas to Improve Access, Affordability, and Innovation

By Andy Slavitt, Acting Administrator, Centers for Medicare & Medicaid Services

Recently, prescription drugs have been in the news a lot, particularly with respect to their cost.  Millions of Americans rely on prescription medications to manage chronic illnesses or treat acute conditions, and drug innovation has resulted in better health outcomes for people across our nation. Because of this, finding ways to improve affordability and access for patients, supporting and increasing innovation in the industry, and – most importantly – making people healthier has become an area of significant interest to many.

As medicines become more precise and targeted, there is the potential to develop new generations of therapies that enable interventions to be better tailored to groups of people and even individuals. Medications in the future can improve health outcomes for many diseases such as cancer and Alzheimer’s, and help us better manage our chronic conditions like diabetes, heart disease and depression, providing significant benefits to patients across the country.

In order to have the maximum impact, medications must also be affordable and accessible.  This is an important issue for Americans and for patients, businesses, and governments. Surveys suggest that as many as 25 percent of Americans cannot afford and, therefore, do not fill the prescriptions on which they depend. And, spending on medicines increased 13 percent in 2014, compared to 5 percent for health care spending growth overall, the highest rate of drug spending growth since 2001. An important element of this increase in costs is due to new specialty drugs — drugs that account for nearly a third of overall costs, but represent less than 1 percent of prescriptions.

Cost concerns aren’t only limited to brand-name medicines.  In some instances, the prices of generics available for years have increased substantially without any additional health benefits for patients. This is a concern across the country, but particularly for consumers on fixed incomes. The Bipartisan Budget Act, just signed into law by President Obama, provides Medicaid with additional rebates if generic drug prices grow faster than inflation, which will discourage manufacturers from increasing prices for generic drugs.

The rhetoric around health care costs can become heated, particularly around the cost of prescription drugs. At times, it can appear as if some of those who produce the pharmaceuticals and those whose lives often depend on them have unaligned interests. But we will not make progress by polarizing this debate. Development of ground-breaking therapies requires significant investment and resources, and we all need to support that important work. We believe patients, manufacturers, providers, insurers and government all share a common goal to foster a health care system that leads in innovation, delivers affordable, high quality medicines, and results in healthier people with access to the care they need. We shouldn’t accept the notion that we as a society must choose between innovation and affordability. We deserve both.

A recent example of a much discussed, highly-effective drug is a therapy used by Hepatitis C patients. Hepatitis C, a debilitating and life threatening infection that leads to chronic conditions of the liver, has undergone a revolutionary improvement in cure rates with innovative new medicines. These medicines are changing the lives of many individuals, but they are also expensive, costing tens of thousands of dollars, sometimes even more than one hundred thousand dollars, per patient. These costs have strained personal as well as public budgets, particularly state health care budgets. Because state budgets generally need to be balanced every year, new drug treatments can surprise states with tens or hundreds of millions of dollars in new spending. As these costs often necessarily compete with other state programs like K-12 education, transportation, law enforcement, and public health programs, some states have made tough choices, including limiting access to these therapies.

Recognizing that we need both access and affordability, today we issued a notice to all 50 state Medicaid directors and sent letters to the CEOs of several drug manufacturers about providing access to therapy for Hepatitis C patients. ( Our notice to state Medicaid directors reminds states of their obligation to provide access to these promising therapies (consistent with section 1927 of the Social Security Act) based on the medical evidence, and that they have tools available to manage their costs. Our letter to manufacturers asks them to provide us with information on pricing arrangements and asks them for ideas to support the provision of these lifesaving medications to Medicaid programs at sustainable prices.

There are no easy answers to these multifaceted challenges, but there is a significant benefit – to all of us – of working together to find a solution. Earlier this week, Secretary of Health & Human Services Sylvia Burwell invited leaders in innovation, policy, care delivery, academia, manufacturing, purchasing, and patient advocacy to share information at a public meeting on how to achieve our common goals.

These are complex issues, and we recognize that the public is relying on our leadership.  We will work to ensure that all viewpoints are considered as we strive for solutions.  In the end, we share a common goal of supporting innovation and improving affordable access to medications that improve health outcomes for patients.

Andy Slavitt

Acting Administrator

Centers for Medicare & Medicaid Services


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